Biofuels Digest special report on India: Lalu backs jatropha

From Biofuels Digest correspondent Joelle Brink

Lalu Prasad Yadav, the rock star of Indian politics, believes in thinking big. Faced with the king sized fuel bill of the world’s largest railroad, he combined Jatropha curcas, a plant whose oil was used as a diesel substitute during World War II, waste land along Indian Railways’ own rights of way, and the economies of scale available only to a national transportation network to create a visionary grow-your-own solution that inspired biofuel advocates around the world.

“My mother always told me not to handle a buffalo by its tail, but always catch it by its horns. And I have used that lesson in everything in my life, including the Railways,” said Lalu.

Lalu, as he is universally known here, is now supporting another large scale biofuel project, this time in his home state of Bihar, India’s poorest. This project, described in a previous report on the coming elections, will use new-generation sugar cane and corn ethanol production technology to help meet the national E10 mandate, increase farm income in the state, create some 400,000 local jobs, and provide surplus power for rural electrification.

But in his role as Union Railways Minister, Lalu increasingly finds himself in the hot seat between food and fuel. In the past, when India had to import much of its food grain, storage of the country’s buffer stock was assigned to Indian Railways so that grain could be shipped immediately in response to local needs. Now, with grain imports rare, exports stopped, commodity prices up and the cost of diesel fuel soaring, the times call for a new strategy. “Forward trading of essential commodities…has been stopped after we realized it was fueling the price rise,” Lalu noted in a recent blog, “Now that we do not have to import food grains, there is no necessity to maintain such a huge buffer stock and the problem now is how to dispose of it.” He favors using the food grain surplus to ensure adequate nutrition for the poorest Indians, who are most vulnerable to food price inflation.

On fuel he has been less optimistic. “Consumption of fuel in India has increased drastically,” he noted recently. “The ‘haves’ have minimum five cars, leading to increased consumption of fuel. Wood was earlier used as fuel, now every household uses domestic gas. One-third of the diesel imported by the country is used by Indian Railways.”

For Indian Railways at least, the situation may be improving. Lalu’s dramatic overhaul of the Railways, completed in 2006, returned it to profitability and competitiveness without privatization, layoffs, pay cuts, service reductions or fare increases, and with the support of the unions. Hailed by Harvard, Wharton, and other US and European business schools, it is now used as a case study in public management. Business students flock to India to meet its subject, whom they call “the New Age Jack Welch,” and he’s hiring.

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